EVENTS

The hidden economics of highly paid speeches

It is reported that once she hits the lecture circuit, Hillary Clinton will get paid around $200,000 for a two-hour speech, like her husband and Arnold Schwarzenegger.

I can understand that you need to pay some speakers to get them to attend. Speaking is often the way that writers earn much of their livelihood because the money they make from the sale of their books and articles may not amount to that much. Even for those who do not depend on speaking honoraria to make a living, an offer of an honorarium partially compensates for the hassle of leaving one’s home and traveling to often distant places to give a talk and then upon returning of having to catch up on all the work that piles up at home in your absence. Even I get paid small honoraria by groups that have money to pay for speakers, though I also speak for free to groups that have no budget for this.

But surely these kinds of large numbers bandied about for the big names make no sense? What could anyone possibly say that would be worth that amount? Clearly the hosts are paying for something other than the content of the talks. But what? Just to be in the same room and breathe the same air? To have a photograph taken with the speaker? To briefly exchange some small talk? And what kinds of organizations have that kind of money to spend on a single brief event?

The only reason I can think of is that the sponsors of the event want to curry favor with the speaker in return for some favor, making it a form of lobbying. Or that they want to draw a large crowd and only a big name will do it. But that cannot be the whole story, surely? Why would they want a crowd just for its own sake?

I don’t think it’s about currying favor. I think it’s more of a status thing. Why is their such an enormous premium on certain high-end goods like certain clothes? To set them up as luxury goods that only some people can afford. If everyone has them they stop being a status symbol. A good example is powdered wigs, which were favored by the upper classes in europe until the price dropped enough that the lower classes could start affording them.

The reason it costs $200k to book a Clinton is because it is a status symbol to book a Clinton and that’s how much the richest, high-status groups are willing to pay for that symbol. I doubt the selection committee thinks that either of the Clintons have something special to say, it’s just so they can say to the other schools’ selection committees “Yeah, we booked Clinton. [We must be high-rolling powe-elite badasses.]”

I have friends who give keynote speeches for $10,000 – $20,000. They’re the first to tell me that nothing they say is worth that much. They need to charge that much in order for corporations (their main customers) to take them seriously.